Thursday Thinkpiece: Class Actions in Canada

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Class Actions in Canada: The Promise and Reality of Access to Justice

Jasminka Kalajdzic is an associate professor and former associate dean of law at the University of Windsor and has a background in private practice as a civil litigator. She is the editor of Accessing Justice: Appraising Class Actions Ten Years after Dutton, Hollick & Rumley and co-author, with Warren K. Winkler, Paul M. Perell, and Alison Warner, of The Law of Class Actions in Canada. She is also the co-lead researcher of the Law Commission of Ontario’s Class Actions Project.

ISBN: 9780774837897
Publisher: UBC Press
Page Count: 249 Pages
Publication Date: 15 Jan 2019
Price: $32.95

Courts have confirmed repeatedly that one of the main objectives of the Canadian class action is to provide access to justice. As former Chief Justice McLachlan stated in a pivotal 2001 decision, “[w]ithout class actions, the doors of justice remain closed to some plaintiffs, however strong their legal claims.” But what does access to justice mean in the context of mass harm? Few courts, and even fewer scholars, explore what is meant by “justice” or what constitutes “access” in class actions. If access to justice is the central preoccupation of our justice system, and if class actions are thought to be a primary mechanism for achieving it, then articulating what we mean by the term is crucial. In the following passage from her book, Class Actions in Canada: The Promise and Reality of Access to Justice, Jasminka Kalajdzic surveys access to justice literature in search of meaning for the concept.

As others have observed, one of the earliest and most comprehensive articulations of access to justice was delivered by Mauro Cappelletti’s ambitious Florence Access to Justice Project. Professor Cappelletti, a leading comparative lawyer, took stock of a massive amount of information about access to justice and law reform initiatives around the world, and ultimately “codified a broadened notion of access beyond the lack of lawyers and beyond courts as the site of justice-seeking.”

Cappelletti traced the emergence of new approaches to access problems in contemporary societies with the metaphor of three waves. In the first wave, under the rubric of judicare, efforts focused on providing legal aid to the poor. In the second, public interest law expanded the scope of access to justice efforts to include the advancement of collective rights. The third wave concentrated on informal and extra-legal justice mechanisms, including alternative dispute resolution and the plain language movement. Each wave represented “crucial phases regarding the intellectual and policy developments produced by this global access to justice movement,” and the recognition of the many barriers to justice beyond the expense of lawyers. Kim Economides aptly summarized the project’s conclusion:

The liberal political theory informing this project, which I believe remains valid even today, was to shift the emphasis away from formal rights towards substantive justice … [T]he main conclusion arrived at is not so much that we need more rights – or more statements of rights (important as these may be for constitutional lawyers or political symbolism) – rather the on-going challenge is to find new ways and means of making the rights citizens already possess both “effective” and “enforceable.”

In this way, access to justice focuses on the two main purposes of any legal system: “First, the system must be equally accessible to all, and second, it must lead to results that are individually and socially just … A basic premise will be that social justice, as sought by our modern societies, presupposes effective access.”

Importantly, effective access was perceived as more complex than access to the courts alone. Attention was increasingly focused not just on dispute resolution but on the construction of disputes themselves: how and why were problems perceived as legal ones, and by whom. The empirical studies of the 1960s and 1970s had revealed that barriers to adjudication were layered and involved a complex social process. In addition to objective barriers such as costs and the complexity of law, subjective barriers related to culture and psychology were also identified as factors influencing access to the legal system. Such evidence fuelled the dispute perspective in legal studies, a body of work that Marc Galanter refers to as the intellectual sibling of access to justice born in the 1970s. The dispute perspective identified a series of “access chokepoints” at which an injured party’s quest for justice might fail. Traditional approaches to access to justice were concerned mainly with removing barriers to claiming entitlements; the dispute perspective emphasized that equally important dimensions of access to justice were barriers to both naming the injury as one that can be remedied by legal institutions, and blaming those to be held accountable for such actions. That is, an injured party might fail to perceive an injury or to identify the cause as a legal wrong, and various economic, informational, and psychological barriers may inhibit seeking legal advice or making a claim. Access to justice initiatives, therefore, had to confront all of these barriers.

The Florence Project also explored the myriad ways in which access to enforcement mechanisms was promoted, describing them as having occurred in three waves. Not surprisingly, the first-wave access to justice perspectives concentrated on access for the poor; because access to lawyers and the courts for these citizens was crucially important, problems of resources were seen above all else as the primary preoccupation of access to justice. Various initiatives to curb costs were formulated, including legal aid, alternative service providers, and contingency fees. The latter in particular were ambitiously proffered as a “simple device for guaranteeing equality of access to the victim,” a view we will see again in the Ontario Law Reform Commission’s Report on Class Actions, discussed below.

Second-wave access to justice approaches broadened the scope of reform efforts beyond individual interests. Both before and after the Florence Project, scholars became concerned with access to justice for diffuse interests, which, like the interests of the economically disadvantaged, have been underrepresented in our judicial and administrative processes. Cappelletti and Garth defined “diffuse interests” as collective interests, like clean air or consumer protection, that are difficult to vindicate because of problems of standing, lack of economic incentive to litigate, and the absence of any deterrent value even if a small claim is successfully pursued. Second-wave access to justice initiatives were thus characterized by a move towards public law litigation, concerned with important public policy issues involving large groups of people. These are the interests served by class actions, which are perceived in the literature as a species of public interest law mechanisms.

The public interest law movement fuelled the idea of the “private Attorney General who could provide access to justice for previously silent voices and thereby ensure public policy decisions were made in the context of balanced advocacy.” These private attorneys general would vindicate rights where regulatory enforcement was lacking. To fund such activity, Owen Fiss argued, you either create a corps of lawyers who will pursue litigation in the public interest (such as the BC Civil Liberties Association or EGALE) or you permit class actions and contingency fees. In Canada, where public interest law firms and organizations are not as prevalent as in the United States, public monies have been made available to the private bar intermittently in the form of legal aid test case funding or the Court Challenges Program. In the United States, the 1980s witnessed growing disquiet about using public money to fund partisan litigation; these same criticisms were used to justify the demise of the Court Challenges Program in Canada two decades later. In light of these various economic and institutional barriers, class actions were viewed as “an evolutionary response to the existence of injuries unremedied by the regulatory action of the government,” and class counsel as a fusion of public officer and private citizen who would vindicate legal rights that are not enforced using either public or private resources.

The Ontario Law Reform Commission (OLRC) echoed many of these same sentiments in its 1982 Report on Class Actions. The report opens with a description of modern society as highly complex and interdependent, characterized by “mass manufacturing, mass promotion, and mass consumption”; the activities of major corporations, international conglomerates, and big government can affect, and possibly injure, large numbers of people. In the wake of such misconduct, “the individual is very often unable or unwilling to stand alone in meaningful opposition.” Class actions, the report concluded, serve an important access function: “By affording ‘an opportunity for voicing mass grievances in an orderly fashion within the framework of the existing “judicial” system,’ they may provide an antidote to the social frustration that exists where neither courts nor administrative agencies are able to protect the rights of citizens on an individual basis.”

The idea that class actions could overcome the various barriers that prevented potential claimants from pursuing remedies, and thus serve an important social function, pervades the report. Access to justice, along with judicial economy and behaviour modification, were the principal justifications animating the report’s ultimate conclusion that class proceedings legislation should be enacted. Although they recognized that “not every wrong can be remedied in the courts,” the commissioners equated access to justice with access to the courts. Indeed, the terms “access to justice” and “access to courts” were used interchangeably in the report. The commission was of the view that

many claims are not individually litigated, not because they are lacking in merit or unimportant to the potential claimant, but because of economic, social, and psychological barriers. We believe that class actions can help to overcome such barriers and, by providing increased access to the courts, may perform an important function in society. Quite clearly, effective access to justice is a precondition to the exercise of all other legal rights.

W.A. Bogart, one of the consultants to the commission, later suggested that not only may it be necessary for courts to weigh in on questions of mass harm but it may be preferable for the courts to do so. He observed that even though in Canada the legislature, not the courts, has made critical decisions on key public policy matters, “this branch of government is unlikely to be able to address with sufficient specificity the myriad issues surrounding particular actions taken by other aggregates or its own agencies and emanations.” Courts, Bogart writes, are better placed to wade through the evidence and be responsive to the needs of those affected by aggregate action.

The scholarship that followed the report attributed a more expansive role to class actions than the somewhat narrow view described by the commission. The paradigm of the class action as social mission emerged in academic literature on both sides of the border. In the United States, commentators have emphasized the societal need to redress wrongs that is served by class actions; for these supporters of class actions, “the goal, consistently, is ready, meaningful justice for the (relatively) disempowered in contemporary, massified societies.” In Canada, Shaun Finn has characterized class proceedings in a very similar way:

Class actions have arisen, in part, to help right the balance in favour of the consumer or ordinary citizen. From this vantage point, the class action can be described as the New Equity of our time. It has stepped outside the boundaries of ordinary procedure by pursuing a mission that no other civil mechanism is able to fulfil … More than a tool of convenience, however, it is entrusted with an explicitly social mission: to protect consumer rights, ensure access to justice, and sanction illicit institutional behaviour.

Several years ago, another lawyer recorded equally strong views about the capacity for class actions to enhance access to justice in a broader sense. In his memoir, Ian Scott, who as attorney general of Ontario oversaw the drafting of the legislation, described the Class Proceedings Act as possibly “the most important legacy of [his] time as attorney general.” As recounted by Supreme Court of Canada Justice Ian Binnie, Scott had an ambitious vision for class actions and access to justice:

There is no doubt that this measure filled an important public need to address the myriad of relatively small claims that were going unremedied in the courts because the cost to each claimant wasn’t worth the candle to litigate. In large part, the availability of class proceedings is an access-to-justice issue. But there is more to the innovation than that. Representative plaintiffs, empowered to litigate on behalf of a class, serve in effect as some sort of private attorneys general to attack what they consider to be shoddy workmanship, environmental banditry or corporate skullduggery. Through class actions, the government found a cost-effective way to promote private enforcement and thereby to take some of the pressure off enforcement by the budget-restrained government ministries.

Scott’s vision suggests that class actions serve a regulatory enforcement function, not as a by-product of its compensatory function but rather as its very purpose in a particular institutional arrangement.

More general scholarly writing on access to justice has been somewhat less enthusiastic in its approval of class actions and the fulfillment of this social mission. Rod Macdonald, for example, acknowledged the distributive justice function of class actions in a modern consumer society, but noted at the same time that many commentators have argued that class actions “merely facilitate the instrumental pursuit of money or a like remedy for a collection of individual litigants who otherwise have little in common,” rather than induce social solidarity. There is skepticism that class action litigation improves access to justice for the poorest in society; as Guido Calabresi has observed, class actions, “though certainly of some use to protect the very poorest in society, have commonly been employed to further environmental and consumer interests which … are more typical of the suburbanite than of the ghetto dweller.” Deborah Rhode has been equally ambivalent. On the one hand, she notes that individual litigation has permitted some defendants to resolve minor disputes without altering future conduct, and that this pattern of behaviour then forces public interest organizations to squander scarce resources in enforcing the same laws for different claimants – a state of affairs that is avoided if class actions are available. On the other hand, Rhode is emphatic in her view, based on empirical studies, that litigation is a very expensive way to compensate victims. From an access to justice perspective, one of the serious flaws in class action litigation no less than in any other kind, she writes, is that victims are undercompensated and lawyers are overcompensated.

Whether Rhode’s view is borne out in the Canadian context is unknown – and unknowable given the dearth of empirical studies evaluating actual outcomes of class proceedings. Have defendant corporations changed business practices as a result of class proceedings (or the threat of them)? How many class actions act as catalysts for government compensation schemes and public apologies, as occurred in the residential schools case? Are class members getting less in real dollars than their individual litigant counterparts? Are class counsel paid too much relative to the risk borne and the service delivered? “Too much” compared with what? John Coffee Jr. has remarked that entrepreneurial litigation does give rise to the fear that clients will be overcharged and underrepresented, but that clients “who never learn of their legal rights receive even less representation and are economically worse off.” His argument is consistent with a view of access to justice that is focused on the importance of the bottom two levels of Galanter’s dispute perspective. Class action lawyers who identify aggrieved parties and commence litigation may be said to provide access to legal information and institutions; they facilitate naming and blaming. Access, in the access to justice equation, is paramount. If one focuses on justice in that equation, however, outcomes, including undercompensation and overcharging, matter a great deal. When corrective justice and substantive results ground one’s conception of access to justice, then the success of class counsel in identifying wrongs is not enough, nor is providing something – such as nominal damages – better than nothing.

To what extent class actions have fulfilled a social mission will be probed in subsequent chapters when we examine more closely how counsel select cases to prosecute as class actions, what information is conveyed to class members, and how they and their counsel are being compensated. Unlike the more developed empirical scholarship in the United States, there is an almost complete absence of an evidentiary basis on which to assess whether and how Canadian class actions advance the social mission that legal commentators have ascribed to the procedure. Nevertheless, unquestioned notions of class actions righting the balance in favour of the disempowered, of class counsel filling the gaps of lax regulatory supervision, and of widespread illicit behaviour curbed repeatedly appear in judicial discussions of class actions as an access to justice mechanism.

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